Israel Considers Special Fund as Daily War Against Iran Costs $430 Million

Israel is reportedly weighing the creation of a special budgetary fund to cover escalating military costs amid its ongoing conflict with Iran, which has already inflicted significant losses on the national economy.

According to Yedioth Ahronoth, Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich are examining plans to establish the fund as part of a broader strategy to manage soaring defense expenditures.

Military sources cited by the newspaper estimate that each day of fighting costs Israel approximately 1.5 billion shekels ($430 million), bringing total expenses so far to roughly 15 billion shekels ($4.88 billion).

If hostilities continue for an additional four weeks, as indicated by U.S. President Donald Trump, the cumulative cost could rise by another 42 billion shekels ($13.6 billion).

Senior officials in the Ministry of Defense have expressed concerns that the war could push the budget deficit to 4.5–5% of GDP, exceeding the latest forecast of 3.9% and surpassing the original target of 3.2%.

A high-ranking finance official warned that prolonged conflict may result in another lost economic year and a substantial increase in the debt-to-GDP ratio.

In the coming days, Finance Minister Smotrich is expected to propose a budget increase of around 9.5 billion shekels ($3.07 billion) for the defense sector, though military officials have indicated that this may be insufficient given the rapid escalation of operational costs and additional funding demands.

The newspaper noted that any additional spending requires government approval, with retroactive parliamentary consent needed only after funds are allocated to the defense establishment.